The Fiscal Control Board (FCB) urged the administration of governor Ricardo Rosselló Nevares to take emergency measures such as partial furlough in all branches of government, cut in contracts and in health care costs because liquidity is so 'critically low that unless emergency action are taken immediately, in a matter of months it will run out of money to pay for essential services, such as education, health care and public safety.'

In the letter signed by the Chairman of the Board, José Carrión III, it was further recommended 'to direct the Fiscal Agency and Financial Advisory Administration ('AAFAF', by its Spanish acronym) to immediately control all accounts, revenues and expenditures of the Government of Puerto Rico and its instrumentalities to implement a new liquidity plan consistent with the guidance in the Board's letter.'

According to the Board, the immediate implementation of a partial furlough program would save $ 35 to $ 40 million per month, equivalent to four days a month for most employees of the Executive Branch and two days a month for teachers and frontline personnel at 24-hour institutions.

Regarding professional services contracts, the Board indicated that they should be reduced by 50%, a guideline that is supposed to apply to the entire Government.

The Board accompanied the letter with a report dated Wednesday from audit firm Ernst & Young on the bridge between the 2014 Government's audited financial statements and the base numbers for 2017 that the government used in its proposed Fiscal Plan. According to the E <><><><><><><><><><><><> Y report, expenditures for 2017 could be underestimated by $ 360 to $ 810 million, based on historical spending patterns. Therefore, the Board concluded that the Government could face a deficit of approximately $ 190 million by July 2017./p

p

The fiscal entity imposed under the federal mandate of PROMESA remarked also that at the end of this year the pension fund of the Public Employees Retirement System will be depleted, which will force the Government of Puerto Rico to separate approximately $ 1,200 million of its operational budget to make pension payments. In addition, the Government will lose approximately $ 800 million in federal health funds under the Affordable Care Act./p

p

strongRosselló Reacts/strong/p

p

In his reaction, Rosselló Nevares thanked the Board for 'the desire to continue working with the Fiscal Plan submitted,' but noted that, '[m]aybe they did not have the opportunity to review the administrative order issued yesterday by (AAFAF), with budget cuts of almost $ 625 million, which will lead to a balanced budget for 2019 and also the control we have imposed on tax credits, which will help strengthen our liquidity. That order goes to the core of their concern and addresses it without a furlough and without more drastic measures'./p

p

'I am confident that the Board will give a space to complete the process and analyze the measures and the actual data that has been presented,' insisted the Governor./p

p

The movements of the Rosselló Administration and the Board in the last 24 hours allow a glimpse into some of their strategies. On the Administration side, and knowing that the Board would release some statement on the Fiscal Plan and the analysis entrusted to Ernst <><><><><><><><><><><><><> Young, the Governor's representative to the Board, Elías Sánchez, summoned the press yesterday for the tax credits order and, close to midnight, when he probably already knew of the contents of a column that the Board Chairman had submitted for his official column at El Nuevo Día, Sánchez issued a letter to the Board in which he does not do much more than to press them again publicly for an emergency request to the federal government on the health funding and the extension of the litigation stay. For its part, the Board yesterday officially called its meeting to evaluate the Fiscal Plan for next Monday, then sent that column from their Chairman in which they telegraph the the governor's plan would undergo changes and today, after the push of Sanchez last night, they pushed back with an urgent action call to action in a letter in which they do not address the requests related to the health funds nor the stay./p

p

See below for documents related to this story./p

p

Read also:/p

p

a href='http://www.noticel.com/noticia/200844/aafaf-emite-orden-para-congelar-presupuestos-y-creditos-contributivos.html'FAFAA Issues Order to Freeze Budgets and Tax Credits (Spanish)/a/p

p

a href='http://www.noticel.com/noticia/200857/gobierno-solicita-a-jcf-emitan-solicitud-de-emergencia-al-presidente-de-eeuu.html'Government Asks FCB to Issue Emergency Request to US President (Spanish)/a/p